BRUSSELS The European Union set Google an ultimatum on Tuesday, giving it a month to come up with detailed proposals to resolve a two-year investigation into complaints that it used its power to block rivals, including Microsoft.
The EU's antitrust chief, Joaquin Almunia, delivered the deadline in a meeting with Google Executive Chairman Eric Schmidt in Brussels.
If it fails to address the complaints, the world's most popular search engine could face a lengthy battle with what is arguably the world's most powerful antitrust authority. If found guilty, it could mean a fine of up to 10 percent of its revenue, or $4 billion (2 billion pounds).
"Since our preliminary talks with Google started in July, we have substantially reduced our differences regarding possible ways to address each of the four competition concerns expressed by the Commission," Almunia said in a statement.
"On the basis of the progress made, I now expect Google to come forward with a detailed commitment text in January 2013."
Almunia said he would seek feedback from rivals and users once he has received Google's proposal.
Google said it continues to work co-operatively with the Commission.
The European Commission has been examining informal settlement proposals from Google since July but has not sought feedback from the complainants, suggesting it is not convinced by what Google has put on the table so far.
The EU watchdog's two-year investigation has centred on complaints that Google unfairly favoured its services over its rivals in search results, and that it may have copied material from travel and restaurant websites without permission.
The Commission is also looking into whether Google restricted advertisers from transferring their data to rivals.
The Commission's decision to press Google to offer more far-reaching concessions comes in sharp contrast to the case U.S. regulators have against the company.
Sources told Reuters the U.S. Federal Trade Commission could drop their investigation into Google without requiring any major change in how the company does business.
(Reporting by Foo Yun Chee; Editing by Robin Emmott, Louise Heavens and Nick Zieminski)